Sean Devine
Director of Natural Gas Sales
Freedom Energy

Natural Gas Market Update

The natural gas marketplace has continued its volatile roller coaster ride through the summer months. Over the past month, we have repeatedly seen the prompt winter months trade between $8.00 to above $10.00. As gas heading to Europe has continued to decline, the markets have digested this forward demand by the day. Increased demand for LNG across the Japanese and Korean markets has held steady throughout the summer and Europe has never had higher demand.

Domestically, storage has remained a big point of pain. As of the last storage report in August, domestic storage levels are still at a deficit compared to the previous year and the 5-year average. Currently, storage levels are at a deficit of 7.9%, trailing by 11.3% compared to the 5-year average. As we are quickly approaching withdrawal season and the restart of the Freeport LNG export facility, storage will be a big headline for these winter months. Recently, the news of Russia suspending gas flows to Europe via Nordstream 1 has put further pressure on the domestic and global LNG markets. While most European nations have worked tirelessly and paid the premium to fill their gas storage facilities, it may not be enough to sustain European industry through the winter without physical gas flowing. This will impact domestic natural gas pricing as well as the global LNG marketplace as well. The global energy crisis has now converted from what many hoped would be a short-term crisis to a long-term crisis with no near-term economic solution.

Explore other energy industry articles in our September Newsletter to help you make informed decisions for your business.

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